Toasters and Campaign Finance Law

Those most hurt by campaign finance laws are the tax payers whose funds are appropriated by incumbents to garner votes and challengers up against the power of government wielded by incumbents.

Whatever happened to that fun little toaster perk that came with a new checking account? Well, it disappeared when banks were allowed to actually give varying interest rates and compete against each other with returns instead of gimmicks. This is a classic example of the workarounds people find to unnatural restrictions on markets. Banks were not allowed to use interest or other returns in checking accounts to get customers but could resort to different marketing ploys. When one method of attracting customers was cut off banks simply found other legal ways to incentivize customers.

Similarly, when one method of political campaigning is curtailed, limited, or stifled by law, politicians will look for other means to attract voters. One often overlooked method available to incumbent politicians is that of government power. The Supreme Court’s decision on aggregate campaign contribution caps is simply removing part of the incentive to give out “toasters” for votes and increases the ability for grassroots campaigns to compete.

Incumbents like campaign finance laws. They have a distinct advantage over challengers that trumps that of campaign financing – the power of the law. Those in power largely decide who gets what, what projects are funded and what states and people receive benefits. You only have to look at spending and legislation in an election year versus non-election year to see how strong this incentive is. Most of the stimulus spending legislated in 2008 was reserved for the next election cycle leading to 2010.

Politicians are like the banks: when limited in how much support they can collect due to campaign finance laws they find alternative and probably preferable ways (to them) to get political support, namely your own taxpayer dollars. Since these are not direct contributions to their campaign they are more dangerous. This abuse carries the guise of public support and welfare but at the heart contains the interest of the status quo. This is hard to curtail. The federal legislator is not likely going to pass a bill minimizing its authority in handing out federal goodies come election time.

The two most injured by the campaign finance laws are the taxpayers and the challenger, not the elected official. No matter the financing of each individual there is no competing with the legislative pen, welding cash and law like a two-edged sword. After the decision was announced by the Supreme Court the victor McCutcheon noted, “With the ruling, we continue to chip away at the long entrenched status quo from the grassroots – a status quo that has kept challengers, better ideas, and new entrants to the political arena mostly locked out… Ensuring that citizens are able to contribute to multiple candidates or causes who share their views only provides further support to a system in which ‘We the People’ hold the ultimate reins of power.”

This alliance between legislative power and elections can only be overcome if the people are genuinely allowed to put the full force of their ideas into place. It is a substantial hurdle to overcome. Incumbents are hard to get out in large part because they keep bribing us with our own taxpayer dollars. Certainly Reagan was right when he stated, “The American Republic will endure, until politicians realize they can bribe the people with their own money.”* (Though erroneously attributing this to Alexis de Tocqueville). The effect is rather powerful: incumbents rarely lose even when approval ratings are rather low. (Though this admittedly is an issue with many other contributing factors.)

It will not be a fair fight with the weight and power of the government backing incumbents, making it impossible to level the playing field until specific measures are taken. First, a constitutionally limited government limits the ability of incumbents to use legislative power for their personal benefit and campaigns. If the Supreme Court were genuinely interested in preventing corruption and the appearance of corruption it would engage with the text and intent of the Constitution to limit government, thus significantly lessening the worry of corruption so often touted as the rationale behind campaign finance laws. In other words, it limits the amount of power that can be abused. Second, unrestricted campaign spending provides the ability for voters and grassroots campaigns to use market forces to support candidates and their ideas.

Last year’s decision of McCuthceon v. FEC has moved the needle toward free speech and removed part of this warped incentive and strengthened the ability of challengers to fight against, often unfettered, government power. However, as Justice Thomas noted, we still remain in a “halfway” house regarding free speech, we are stuck between truly free speech and restricted speech. This restriction is like the old banks, but instead of toasters, incumbents look to legislative power to boost their marketability while challengers and their ideas are left holding the short end of the political stick.

James C. Devereaux is an attorney and freedom fanatic. Questions, complaints and hysterics can be sent to james@reasonedliberty.com or follow on twitter @jcdevereaux1.

*This is an updated version: It reflects the attribution of a quote to Ronald Reagan instead of Alexis de Tocqueville. This quote is apparently widely attributed to Alexis de Tocqueville, including by Reagan himself.